Australian employees continue to battle record living costs despite inflation cooling in the nation, new data from the Australian Bureau of Statistics (ABS) revealed.
The consumer price index (CPI) – the measure of inflation – slipped 6% over the year to the June quarter. It rose 0.8% quarter-on-quarter.
Meanwhile, employees saw their living costs climb another 1.5% over the three months to June, clocking in 9.6% higher than they were in same quarter of 2022.
“The rise in annual living costs for employee households is the largest increase since this series started in 1999,” ABS head of prices statistics Michelle Marquardt said.
“The last time the CPI recorded an annual increase of 9.6% was in 1986.”
And it wasn’t just the nation’s employees feeling the pinch.
All measured household types have seen their cost-of-living increase faster than the CPI over the last 12 months.
Australians receiving the age pension saw their living costs rise 6.7% over the year to the June quarter while those of self-funded retirees lifted 6.3%.
“Higher prices for insurance, food, and housing contributed to increased living costs for all household types,” Ms Marquardt said.
"The impact of price changes on household budgets varies between household types with their different spending patterns."
The rising financial pressure felt by Aussie households appears to be having major ramifications on the retail sector.
Data released last week found retail turnover slipped 0.8% in June to around $35.2 billion, surprising economists and marking the first monthly fall since November 2022.
The major difference between the ABS’s living cost indexes and the CPI is the inclusion of mortgage interest rates in the former and new dwelling costs in the latter.
Perhaps unsurprisingly, the largest dint felt by the finances of Aussie workers came from rising interest rates on home loans – with interest charges climbing more than 91% year-on-year.
The Reserve Bank of Australia (RBA) began hiking the cash rate from a record low of 0.1% in May 2022 in a bid to tame inflation.
That's also coincided with many homeowners rolling off fixed-rate mortgages amid the high interest rate environment.
Economists at the big four banks now predict the cash rate peaked at 4.1% in June, with two consecutive holds put forward since.
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